Wei Shangjin
I predicted in January this year that the spread of coronary virus diseases in China in 2019 will reach an inflection point in the second or third week of February.In fact, since February 22, the number of severe and critical illnesses in China has declined all the way, and new cases have not been added in recent days, except for foreign input cases.Unfortunately, the number of new infections outside China is rapidly increasing, and it may bring catastrophic consequences to public health and global economy.
Faced with the popularity of epidemic diseases, policies makers of various countries can learn some useful lessons from China and other countries.These lessons are particularly useful for those countries that have not yet encountered a large -scale outbreak.The most important point is that they must act immediately.
First of all, the government and public health authorities must increase their preparations before the epidemic outbreak, because when the virus strikes, the demand for detection kits, masks, alcohol wet paper towels, protective clothing, hospital beds and life maintenance instruments will surge.In this regard, Europe and the United States have not properly used the six weeks of their hands to prepare in advance; other countries should now be prepared.
If the domestic supply of the above materials is limited, countries should consider increasing imports from China, Japan and other places. After all, most of these are not high -tech products, and many countries can produce, especially China, which is currently eager to restore production.The factory there has related production capacity, and it can also respond quickly to the rising global demand.
In addition, the national emergency plans of various countries should ensure that a sufficient bed can be provided during the outbreak of the epidemic, especially the intensive care unit.If this plan lacks feasibility or insufficient supply, the government must consider building several new hospitals quickly, and if necessary, foreign enterprises can also be introduced to participate in construction.
At the same time, the public sector must also inform the public as soon as possible, clearly, and effectively how to minimize the spread of viruses through personal hygiene and social isolation.In this regard, Singapore is an excellent model. Local health officials and even prime ministers at all levels have provided accurate medical information to the public.
It is important that once there are signs of the epidemic, the government must take decisive action early to force social isolation.As shown by Silicon Valley entrepreneur Tomas Pueyo, such measures are very effective in China, and it is also necessary to implement it in many other countries.
In addition, in order to reduce the economic impact of the epidemic of epidemic, policy makers must provide fast emergency assistance to workers, enterprises and financial institutions.The crown disease epidemic will have a strong negative impact on the overall economy in the short term, and the impact of some industries will even continue for a long time.
The negative supply shock caused by the factory closure will be transmitted to the downstream departments around the world through the supply chain, including those countries that have not yet occurred.In addition, the popularity of epidemic diseases will cause income and demand to shrink, which will affect the upstream departments of various places. The decline in commercial income and confidence may trigger the reduction of product and service demand.In order to break the expectations of self -verified declines, the government must quickly launch an emergency plan, which may include suspending corporate tax and loan interest payment, financial support and health welfare guarantee for workers, as well as financial assistance to banks.
Countries must also use digital technology as much as possible.Perfect online shopping services can offset some of the economic difficulties faced by retailers and factories, but this requires broad network channels, enterprises and families' extensive acceptance of digital payment, and high -efficiency and cheap payment systems.
Help to promote national public health goals.
In terms of economic stimulus, internationally coordinated plans are more effective in responding to the global economic recession than the isolation actions of individual countries, especially in the implementation of financial stimuli.When government tax reduction or temporary financial assistance to families in need, the growth of domestic demand may overflow to foreign producers through imports.This phenomenon is particularly serious for small and medium -sized economies with a higher rate of imports (GDP), which has caused them to be unwilling to implement sufficient stimulating measures.
But this problem can be resolved by international coordination.When all countries increase their total demand, the exchange rate does not need to change too much, and the increase in global demand will benefit everyone.The G20 or International Monetary Fund Organization can play a key coordination role in this regard.
Finally, reducing tariffs and non -tariff trade barriers will also help fight the recession caused by the popularity of epidemic diseases.Many large central banks have reduced policy interest rates to nearly zero levels, and it is difficult to take more measures to respond, but at the same time, there are still various countries that have various trade barriers, which not only increases production costs, but also reduces domestic families.actual income.
Although the risk of economic recession usually induce the government to further increase the trade barriers, to increase global output and employment, completely opposite measures must be taken.Like fiscal expansion, coordinated trade liberalization provides the greatest opportunity for success, because each country's concessions to foreign companies will also improve the channels for enterprises to enter foreign markets.This is also where the World Trade Organization and G20 must strengthen leadership.
The popularity of crown diseases may cause the world to fall into a disaster, but this crisis also provides rare opportunities for governments of various countries to implement relevant policy reforms.Essence
Although people from all over the world have various interesting interpretations of the relationship between danger and opportunities, the term crisis in Chinese is indeed composed of crisis (danger) and machine (meeting), respectively.To this end, governments around the world should seize the opportunity and do not let the opportunities brought by the crisis crisis slip away in vain.
The author is a professor of financial economics at the University of Columbia University Business School and the School of International and Public Affairs.
English Title: Beating Covid-19 and the Economic Pandemic
Copyright: Project Syndicate, 2020
